In response to the new Government's 'Coalition Agreement', BAA has announced that it will stop work on the planning application for a third runway.

The company also plans to stop buying properties in Sipson, after a period of notice. In line with assurances given to local residents in 2009, Heathrow will continue to consider buying properties which have been issued with a bond under its long-term property market support scheme until 22 June 2010.

Colin Matthews, BAA's chief executive officer, said: "We recognise the importance of government policy in a matter as significant and controversial as runway capacity.

"The policy intentions of the new government are clear and it is no longer appropriate for us to purchase properties. Equally important is our intention to stand behind our commitment made to provide time for those local residents who wish to sell their properties to us, to do so.

"We introduced the current scheme to assist homeowners faced with an extended period of uncertainty. Today, we will meet with the local community and its representatives to discuss the new situation.

"Heathrow plays an important role for the UK and supports thousands of jobs. We continue to believe that new capacity would strengthen the UK's trading links with the global markets on which our economy and our competitiveness depend."

Cllr Jagdish Sharma, leader of the London Borough of Hounslow, speaking on behalf of the 2M Group which opposes Heathrow expansion, said this was the final victory for the campaign, “I am delighted that BAA has finally seen sense. This is great news for people living on both sides of the airport. An additional runway with all the noise and pollution would have been devastating for their quality of life.”

2M councils had joined forces with environmental groups to challenge the previous government’s decision to support the new runway.

Lord Justice Carnwath ruled in March that ministers were wrong to have proceeded as if nothing had changed since the 2003 airport white paper setting out plans for expansion across the UK. He said the councils had made a powerful demonstration of the developments in climate change policy since 2003.

Cllr Sharma added, “The judgment provides an opportunity to draw a line under the transport department’s previous decisions. Now that the runway battle is over we will be pressing for tougher controls on noise and air pollution around the airport.”

The High Court challenge was brought by Hammersmith and Fulham, Hounslow, Hillingdon, Richmond upon Thames, Wandsworth and Windsor & Maidenhead councils with support from Kensington and Chelsea, Transport for London and the Mayor of London.

The councils were joined by the local residents group (Notrag), aircraft noise campaigners HACAN, World Wildlife Fund UK, Campaign to Protect Rural England and Greenpeace. The Royal Society for the Protection of Birds was an expert witness.

The councils are all members of the 2M Group - an alliance of local authorities concerned about the environmental impact of Heathrow expansion on their communities.